THE WHITE HOUSE Office of the Press Secretary

For Immediate Release

November 10, 1998

REMARKS BY THE PRESIDENT TO PRESIDENT'S EXPORT COUNCIL

The Ronald Reagan Building and International Trade Center Washington, D.C.

1:35 P.M. EDT

THE PRESIDENT: Thank you. Well, Lionel, you did agreat job. The first thing I asked him today was whether or not hisspeech was going to be beamed into his school. (Laughter.) I loveBrooklyn; I've been to Senator-elect Schumer's home. I've spent alot of time in Brooklyn. Neither Chuck Schumer, nor I would have thecourage to leave our electorate on Election Day. (Laughter.) Andyou did. And for that reason alone I hope that you are rewarded.I'm glad you're with us.

I want to welcome the other student leaders andteachers, business people here today and those joining us bysatellite and the Internet. I'd like to thank Mike Armstrong for hisgreat leadership of the President's Export Council and all the othermembers of the Council who are here with us on the stage today fortheir service.

I want to thank Secretary Daley for doing a superb jobas Commerce Secretary, not only in his responsibility to promoteAmerica's exports and generally a free trading system throughout theworld, but for the many other good things he does for the Americaneconomy as the Secretary of Commerce.

I'm very glad to address this first ever national townhall meeting on trade. When the President's Export Council wascreated 25 years ago to promote America's businesses and jobs -- justthink of it, people are joining us today via satellite and theInternet -- 25 years ago, communications satellites were largelytools of our military. Even six years ago, when I took office, theInternet was basically the private province of physicists -- therewere about 50 sites. Today, it's the fastest growing organ ofcommunication in all of human history. Today, the Internet andcommunication satellites are not instruments of war, but ploughsharesto help us to cultivate education and understanding, exports and thegrowth of our global economy.

I think I'd like to say that it's also fitting that thistown hall be held in a building named in honor of President Reagan,because he believes deeply in our indispensable role in promotingfreedom and free trade throughout the world. In 1982 he said this:"Great nations have responsibilities to lead. If we lower ourprofile we might just wind up lowering our flag." Well, we stillhave a responsibility to lead -- in the aftermath of the Cold War, Iwould argue a greater responsibility than ever before.

That is why, six years ago, we charted a new course forour country, designed to preserve both the American Dream and theAmerican community at home and America's leadership for peace andfreedom and prosperity around the world. We had a three-word motto:opportunity, responsibility and community. That meant, among otherthings, that we took a new direction with our economy -- a new

strategy that began first with fiscal discipline, because our deficitwas $290 billion that year, slated to go to nearly $400 billion lastyear. No country can buy prosperity by spending itself into debtdeeper and deeper every year.

In the years since, we have seen that the hard work ofreducing the deficit and producing the first balanced budget in ageneration has paid rich dividends: lower interest rates, higherinvestment, more growth, rising wages, a 28-year low in unemploymentwith a 32-year low in inflation. We have more to do. We must keepAmerica fiscally sound. We must deal with the Social Securitychallenge that we face. We must expand the reach of enterprise intothose neighborhoods and places in America that have not yet felt thiseconomic recovery. But it is working.

The second thing we did in building this historicsurplus was to make equally historic investments in our people: ineducation, in health care, in economic empowerment. In the newglobal economy, education and technology, research and development,health care and a clean environment -- all these things will beincreasingly valued, and without them it will be very difficult toprove that the global economy works for ordinary citizens.

We have more to do, especially in education. And wehave more potential in research, in medicine, and in economic andtechnological areas. But we are doing the right things.

The third thing that we did with our economy, afterbalancing the budget and increasing investment, was to try to makethe global economy work more aggressively for our people. During thepast five years, exports have helped to create more than two millionjobs -- high-skilled jobs that on average pay more than 15 percentabove the average.

The free and open exchange of capital and ideas andgoods across the globe has been vital to our prosperity throughoutthis century we're about to leave, but it will be far more importantto our continued growth in the 21st century. That is why I have beenso committed to opening markets to our goods and services throughoutthe world.

During the past five years, we have completed 260 tradeagreements to open global markets to areas from automobiles totelecommunications. Now, as we meet here today, this global tradingsystem is facing two great related challenges: first, the mostserious financial challenge since World War II; and second, thecontinuing need to put a human face on the global economy -- that is,to make sure that in every country increased trade and investmentworks to benefit ordinary citizens.

A full quarter of the world is now living in countrieswith declining or negative economic growth. Millions who were in themiddle class in Asia or Russia, for example, have been devastated byeconomic problems in their own countries. Therefore, we see peoplefor the first time in a good while beginning to question the premisesof the free flow of goods and services and capital.

With the whole world increasingly linked together in aglobal marketplace, with global communications, clearly these shocksabroad also reverberate at home. We saw it most clearly in the lastseveral months in the markets that our farmers no longer had in Asia,leading to steep drops in farm prices here at home. We see it mostclearly today, perhaps, in the fact that America's economy hasremained strong, and with other countries suffering from no growth ornegative growth, the flooding of our markets by certain products,especially steel, which has become a big source of concern and aboutwhich I'll say more in a couple of minutes.

The point I want to make to all of you, especially tothe students who are here, is that resolving the global crisis todayis vitally important for the American people -- from Brooklyn toNorth Dakota, in small towns and big cities. Why? Not only becauseit is in our interest to help our friends around the world tocontinue to enjoy the benefits of freedom and prosperity, but becauseif we want to keep our own economy and social fabric strong, we haveto do so in the context of a growing economy where people embrace theideas of freedom and free exchange of goods and services. That iswhy America must continue to lead in building a strong financial andtrading system for the 21st century.

Over the past year we have pursued a very aggressivestrategy to combat the financial crisis and to protect our jobs hereat home. In September I called for urgent action to spur growth andto aid those nations most in need. The nations of the world haverallied to this agenda. Japan has committed substantial resources torepair its troubled banking system. Brazil is moving forward toaddress its fiscal problems. The international community is workingto support these efforts.

America, Japan, and others have cut interest rates. OurCongress agreed to fully fund our commitment to the InternationalMonetary Fund. Through our Export-Import Bank and our OverseasPrivate Investment Council, we're providing credit and investmentinsurance to encourage the flow of capital to developing nations.The World Bank has announced that it will expand its spending tostrengthen the social safety net in Asia, where so many people havebeen hurt by financial and economic collapse.

Just 10 days ago, the Group of Seven major industrialnations announced additional steps: a new line of credit to helpnations with sound economic policies fight off the financialcontagion in the first place -- it is always less expensive to keepsomething bad from happening than it is to fix it once it happens --and second, a new World Bank Emergency Fund to aid those who aresuffering the most.

Now, these are very, very positive steps. But there isstill much more to do to keep countries on the path to prosperity tostop future crises before they start. I have called on the worldcommunity to act to adapt the architecture of the internationalfinancial system for the new realities of the 21st century -- the24-hour a day high-tech markets; with $1.5 trillion a day in currencyexchanges. Let me say that again.

We set up a system for all the students here that wouldenable more and more trade to occur in goods and in services and moreand more investment to occur. Now, obviously, if you're going tohave more trade and more investment in other countries, and theirmoney is different from yours, there has to be a system to ensure afairly free flow of capital around the world because those thingshave to be purchased or invested in in other countries. But today,the financial markets, more than any other time, are operating as anindependent economic force -- and let me say again -- $1.5 trillion aday is changing hands in international currency exchanges. That ismany, many times the total value of goods and services traded in anygiven day.

And that is at the bottom of a lot of the challengeswe're facing today. How do we continue to support the necessaryfree flow of capital so that we can have the trade, the investment weneed, and avoid the enormous impact that a financial collapse canhave when the money being traded on its own is so much greater thanthe total value of goods and services being traded or investmentsbeing made.

Later this week, leaders of the Asia Pacific communityof nations will gather in Asia to continue our efforts toward a moreprosperous and secure future. We'll work on speeding the economicrecovery in Asia, strengthening the social safety net, helpingcompanies there to restructure their debt so they can emerge from thecrushing burdens they face and once again employ people and pay themwages.

Now, in solving the current crisis in Asia, Japan is ofparticular importance. It is, after all, the second largest economyin the world. It has been a key engine of growth for the entireworld over the last two decades. The restoration of growth in Japan,which has been stalled now for more than five years, is absolutelyessential to the restoration of growth in the remainder of Asia. Therest of us look to Japan to move quickly to implement the goodbanking reforms which have been passed, to spur demand for goods andservices in the home market, to reduce unnecessary regulation and toopen its markets.

At the Asia Pacific leaders summit, our nations willwork together to bring down more barriers to trade. Last year weagreed to consider opening nine key sectors, worth more than $1.5trillion a year in world trade. We need to deliver on thatagreement.

We must also, here in the United States, move ahead ontrade initiatives with Latin America, with Africa, with Europe. Wemust launch negotiations on agriculture and other areas within theWorld Trade Organization as we move toward next year's ministersmeeting here at home in the United States. And here, on our domesticfront, we need to find common ground on fast track negotiatingauthority, so that I can continue to negotiate good tradingagreements with other nations.

Now, as we deal with all these issues, we must rememberthat it's also important to keep in mind that there must be a humanface on the global economy -- we must be able to show that economicexchange benefits ordinary citizens. Therefore, we will continue towork for trade agreements that include important protections forworkers, for health and safety, for the environment; and to work fora world trading system that is more open toall elements of society and more designed to lift the fortunes of allpeople in all trading countries. Expanded trade must not provoke theso-called "race to the bottom."

We'll also work hard with our Congress to make our ownsanctions policy more judicious, more fair, more cost-effective --something our business community has talked to us about quite a lot.

America must also continue to lead the world to have anopen rules-based trading system. If we expect the American people tosupport expanded trade, free trade must also be fair trade. I'mespecially concerned, as I said earlier, about the impact of theinternational financial crisis on American steel workers and oursteel industry. We are committed to a full and timely enforcement ofour trade laws to address unfair trade practices affecting thisindustry, and we will insist that our key trading partners play bythe rules.

I am pleased that Secretary Daley earlier today releasedregulations to implement our laws against unfairly subsidizedimports. This expedited action will greatly help our steel and otherindustries as they review the legal remedies available to them.

Our companies deserve fair treatment overseas as well.Earlier today I signed legislation approving an agreement with otherindustrial nations to crack down on bribery in international businesstransactions. This agreement requires the nations that sign it toenact laws barring their citizens from bribing foreign officials towin business in those countries.

We've had laws like that on the books for more than 20years. I'm sorry to say, as many of the people up here on thisplatform can testify, it's cost us a lot of business over the last 20years to do the right thing. But it is clearly the right thing.American companies deserve a level playing field, and now, with thislegislation and this international agreement, we will have it.

Let me say one other thing. We believe the globaleconomic system is strengthened by openness, so that people can judgewhether governments, businesses, and international institutions likethe WTO and the IMF act responsibly and honestly. And we willcontinue to push for greater openness.

Finally, as I have told audiences this year fromSantiago to Shanghai, no matter what we do in the United States totry to restore growth, no matter how good our world trading andfinancial systems are, there are some things nations must do forthemselves. Unless nations deepen their democracies, unless theyprovide good education, health care to the maximum ability accordingto their means, unless they have a fair legal system, unless thecitizens of each nation feel they have an actual stake in their owneconomies and they've got a good chance to get a fair shake if theywork hard and play by the rules, unless these things are present,then nations will resist -- people will resist the reforms that a lotof these nations have to undertake now to recover and to grow overthe long run. Unless people are empowered with the tools to mastereconomic change, they will feel they are its victims, not itsvictors.

So I say again, we have heavy responsibilities here inthe United States. We must continue with our efforts to generategreater economic growth, to seek freer and fair trade, to see thattrade and the global financial systems are modified to meet the needsof the 21st century, to roll back the present financial crisis, andto design efforts that will lift the lives of all people over thelong run. We have to do this, but other countries must do their partas well.

All of you young people who are out here, if you look atwhere we are in the United States, with a population that is morediverse racially, ethnically, culturally than ever before in ourhistory, we are well-positioned to do better in the 21st century thanat any time in our glorious past. If you look at the efforts beingmade to overcome old problems -- from Northern Ireland to the MiddleEast, to Bosnia and Kosovo, to tribal difficulties in Africa -- andyou look at the continuing troubles that are still out there, it isclear that if a unifying, rather than a dividing, vision of humanlife and human society is the dominant one the young people in thiscountry and this world bring to the world of the 21st century, wehave the chance to have the most peaceful, most prosperous, mosthealthy, most forward-looking period in all human existence forpeople throughout the globe.

But it is by no means certain. And this is a criticalperiod. Everything we do for economics should be seen not as aneconomic matter alone, but should be done because it also advancesthe texture and meaning and quality of life -- the ability offamilies to raise their children, the ability of people to get bettereducation, the ability of people to live in peace, the ability ofpeople to look beyond their noses and the struggles of putting foodon the table today to the need to reconcile our growing economy withour fragile environment around the globe.

That's what this is about. That's why your presencehere is so important. And that's what I ask you to think of. Yes,

America is blessed. Yes, we're doing well. Yes, we're making moneyfrom the global economy. Yes, we can make more money and have morejobs and enjoy more prosperity. But in the end, the purpose of allthis is to improve the quality, the depth, the texture of life -- notonly for ourselves, but for the cause of peace and freedom throughoutthe world.

I believe we can do it. I hope you will support that.And I hope very much that, once again in the coming year, we willmake great advances here in the United States to that end.